SEOUL (dpa-AFX) - Samsung Electronics Co Ltd (SMSN.L, SSNNF.OB, SSNLF.OB) reported a profit for the first quarter that dropped about 56.01 percent from last year, reflecting weak memory chips and display panels demand. Quarterly operating profit also dropped 60.15 percent from the previous year, while sales decreased about 13.50 percent.
Looking ahead to the second quarter, the company expects limited improvement in the memory chip market, as demand will likely begin to improve for major applications such as mobile products, while price declines will likely continue.
For the second half of 2019, the company expects memory chip demand for high-density products to increase, but uncertainties in the external environment will persist.
Growing competition in the mature TV and smartphone markets is expected to pose a challenge in the second half, the company said.
Looking ahead to the second half of 2019, the TV market is projected to grow slightly year-over-year despite global economic challenges. Demand for appliances is also expected to rise compared with the first half as political tensions surrounding global trade ease.
The smartphone and memory chips maker delayed the release last week of its Galaxy Fold handset.
The company reported that net income attributable to the shareholders of the parent company for the first-quarter of 2019 dropped 56.01 percent to 5.11 trillion Korean won from 11.61 trillion won last year.
Quarterly operating profit declined 60.15 percent to 6.23 trillion won from 15.64 trillion won in the previous year.
Quarterly sales decreased 13.50 percent to 52.39 trillion won from 60.56 trillion won the prior year.
The Semiconductor Business posted consolidated revenue of 14.47 trillion won and operating profit of 4.12 trillion won for the quarter.
The Display Panel Business reported 6.12 trillion won in consolidated revenue and 0.56 trillion won in operating loss in the first quarter. It posted an operating loss due to weaker profitability in both mobile and large displays.
Looking ahead to the second quarter, Samsung expects limited improvement to earnings as demand for flexible displays is likely to remain weak.
The IT & Mobile communications division posted 27.2 trillion won in consolidated revenue and 2.27 trillion won in operating profit for the quarter.
Overall market demand for smartphones decreased quarter-over-quarter as the industry moved into a seasonally weak period, but Samsung reported a quarter-over-quarter rise in revenue reflecting solid sales of the Galaxy S10.
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